The Wage Curve an Italian Perspective

In this paper we appraise the existence of a negative relationship between the wage level and the unemployment rate (the wage curve) across Italian regions, using data from the Bank of Italy’s Survey on Household Income and Wealth. The main advantage of this data-set is the availability of information on human capital characteristics of individuals (such as gender, age and education) and, more importantly, on hours worked. Our main finding is that, even though a wage curve exists in Italy, at least after the 1992-93 wage reforms, for annual and monthly wages, no such relationship exists for hourly wages. Consistently, after the reforms we find a negative elasticity of annual hours and months worked with respect to the unemployment rate.